Research On The Impact Of Financial Characteristic To Cash Holding Level In Chinese Manufacturing Listed Companies

Cash holdings is an important issue in financial management. Cash have the strongest cashability and can be used to meet the various needs of business operation costs. Sufficient cash can help enterprise reduce risk and enhancement enterprise asset liquidity. But cash cannot create value, so its holdings is not the more the better. Even the bank deposit, its interest rate is very low. Too much cash, therefore, it provides with the decrease of marginal benefit and liquid, even make the decline in income levels.In order to establish a reasonable cash management system, we must explore the influence factors of cash holding level further. Western scholars proposed three major theory to explain cash holdings behavior, respectively for the tradeoff theory,, agency theory and optimal sequence financing theory.Domestic studies about cash mainly concentrated in the cash management and the relationship between cash holdings and corporate value. The research is not much about the influence factors of cash holding and decision-making from a deeper level of financial theory.The domestic research for cash holdings is still in the exploratory stage, there is plenty of room for further research. Foreign research about cash levels influence factors of the study began in1998(Kim) and1999(Opler), and mainly concentrated in the capital market more developed countries. These countries have clear property rights, reliable contract and law, its capital market structure are improved to specifications. But capital market in China has its particularity, which is an emerging market, and is rooted in the economic transformation, thus study of cash holdings abroad is not suitable for our country. In addition, previous studies mostly analysis the influence factors of cash holding level from enterprise value, corporate governance, ownership structure, etc. The discuss about the impact of cash holdings on the financial characteristics is not much. So based on above points, this paper will be based on the characteristics of enterprise financial level to explore factors influencing the effect of cash holdings, cash management provide a meaningful reference for the enterprise. Specifically, this paper Mainly divided into six chapters:The first chapter is the introduction part, in this part first discussed the research background of this article, the double meaning of practice and theory, and then defined two concepts:"cash" and "financial characteristics", finally expounds the main innovation of this article.The second chapter is the theoretical basis and literature review, in this part elaborated the cash holdings of the relevant theoretical basis, mainly countain tradeoff theory, agency theory and the financing order theory. Then according to generalized influence of financial characteristics and corporate governance factors to the level of cash holdings, we got the situation sorted out. With a review of the previous research results, it provides the reference for further research.The third chapter is to analyze the level of cash holdings of listed companies, this part mainly discusses the manufacturing status of cash holdings of listed companies.Fourth chapter is the empirical research design and data, this part are based on a previous chapter, carried on the empirical model of the definition of the dependent variable and independent variables and control variables. Then we introduced the selection of sample process. Finally we have established the basic model.The fifth chapter is the empirical test results analysis, this chapter mainly carried on the descriptive statistics, correlation analysis and the multicollinearity test according to the empirical research design. Finally established three models, and took the regression test for the study of above assumption. So we have the influence further understanding about factors of cash holding level.Last chapter is the research conclusion, in this part, we summarized the main research conclusion, put forward some enlightenment and Suggestions, and points out the shortages of this paper and prospect for future research.This paper mainly has the creation as follows:first, our sample is a single sample about industry. Second, in this paper, we put forward the best cash holding level reference range in the industry. Third, we found that in recent years, different annual cash levels have obvious difference, thus introducing year as control variable. Fourths, we took variance analysis about the level of cash holdings.